Matthew Belloni on the ‘Apple TV+ Experiment’

Matthew Belloni has a very good take on Apple TV+ at Puck (that’s a gift link that should get you through their paywall — but which requires you creating a free account, sorry): All of which fed into the self-centered fears of my lunch date. What, if anything, does the current state of Apple mean for its entertainment business? After all, more than five years into the Apple TV+ experiment, it’s never been entirely clear what C.E.O. Tim Cook and services chief Eddy Cue are up to in Hollywood. Certainly not making money, at least not in the traditional sense. The Information reported today that Apple lost $1 billion on Apple TV+ last year, following a Bloomberg report that more than $20 billion has been shoveled into making original shows and movies since 2019. That’s not nothing, even for a company worth $3 trillion. The “loss” number is a bit misleading, of course, considering Apple has always said that a key goal is to leverage Leo DiCaprio and Reese Witherspoon to thicken its brand halo and the device “ecosystem,” ultimately boosting its other businesses. But still… for all its billions, Apple TV+ has accumulated only about 45 million subscribers worldwide, according to today’s Information report and other estimates. That’s far less than Disney+, Max, and Paramount+, all of which launched around the same time. Those rival services are attached to legacy studios with rich libraries, but they’re not attached to a company with $65 billion in cash on hand and a device in the pockets of 1 billion people that also delivers bundle-friendly music, news, and games. Apple declined to confirm or comment on any numbers, but a source there suggested the subscriber number is higher than 45 million and that the global nature of the sub base is being undercounted by U.S.-oriented research firms. Maybe. The company reveals zero performance data beyond B.S. “biggest weekend ever!” press releases that the trades accept without skepticism and producers like Ben Stiller and David Ellison post with “blessed” emojis on their social media. No one outside the company really knows how the Apple TV+ business is performing. One interesting nugget is this chart, which suggests that subscriptions to TV+ have boomed since Apple and Amazon worked out a deal to sell TV+ subscriptions through Amazon Channels in Prime Video at the end of last year. That deal has, seemingly, moved the needle. Another interesting nugget is that TV+ seems to suffer from a higher churn rate than other streaming services. Said Belloni’s Puck colleague Julia Alexander, “Fewer than 35 percent of all subscribers keep the service for longer than six months.” That’s kind of crazy. I’d think TV+ would have less churn, not more, than the industry average — that the Apple TV+ audience is small but loyal. Perhaps this is the unsurprising side effect of Apple giving away 3-month trials when you purchase new devices. But I also truly wonder if TV+ subscriptions are the hardest for industry groups to measure, because so many people who do subscribe watch through tvOS (or, on their phones, on iOS) where everything is private. Belloni hints at this, and says little birdies at Apple told him the TV+ subscriber base is larger than they’re getting credit for. And how do you count Apple One subscribers toward TV+’s subscriber base? My vague theory about Cue and Cook’s thinking about getting into this business has been about making it one leg among several on the stool of reasons to subscribe to Apple One. That Apple will take subscribers who are only subscribed to TV+, or only subscribed to TV+ and Apple Music, but what they really want is to get people to subscribe to Apple One, which because it includes iCloud storage, almost certainly has very little churn. Belloni closes thus: Apple wouldn’t be the first tech powerhouse to dabble in professionally produced content only to retreat. [...] Neither Cook nor Cue has suggested anything like that, and Apple, in just over five years, has become a reliable partner and a high-quality buyer for Hollywood shows and movies. In some ways, it’s remarkable how fast Apple TV+ became part of the entertainment community. Whether that lasts is the question. Here’s where I will point out that Apple isn’t like other tech companies. Apple isn’t a move fast and break things company. They’re a measure twice, cut once company. When they commit to something, they tend to stay committed. And they’re very, very good at playing long games that require patience, especially when entering new markets. Look at Apple Pay. 10 years ago, it was widely panned as a flop after a slow first year. Now it’s everywhere.  ★ 

Mar 21, 2025 - 20:56
 0
Matthew Belloni on the ‘Apple TV+ Experiment’

Matthew Belloni has a very good take on Apple TV+ at Puck (that’s a gift link that should get you through their paywall — but which requires you creating a free account, sorry):

All of which fed into the self-centered fears of my lunch date. What, if anything, does the current state of Apple mean for its entertainment business? After all, more than five years into the Apple TV+ experiment, it’s never been entirely clear what C.E.O. Tim Cook and services chief Eddy Cue are up to in Hollywood. Certainly not making money, at least not in the traditional sense. The Information reported today that Apple lost $1 billion on Apple TV+ last year, following a Bloomberg report that more than $20 billion has been shoveled into making original shows and movies since 2019. That’s not nothing, even for a company worth $3 trillion.

The “loss” number is a bit misleading, of course, considering Apple has always said that a key goal is to leverage Leo DiCaprio and Reese Witherspoon to thicken its brand halo and the device “ecosystem,” ultimately boosting its other businesses. But still… for all its billions, Apple TV+ has accumulated only about 45 million subscribers worldwide, according to today’s Information report and other estimates.

That’s far less than Disney+, Max, and Paramount+, all of which launched around the same time. Those rival services are attached to legacy studios with rich libraries, but they’re not attached to a company with $65 billion in cash on hand and a device in the pockets of 1 billion people that also delivers bundle-friendly music, news, and games. Apple declined to confirm or comment on any numbers, but a source there suggested the subscriber number is higher than 45 million and that the global nature of the sub base is being undercounted by U.S.-oriented research firms. Maybe. The company reveals zero performance data beyond B.S. “biggest weekend ever!” press releases that the trades accept without skepticism and producers like Ben Stiller and David Ellison post with “blessed” emojis on their social media. No one outside the company really knows how the Apple TV+ business is performing.

One interesting nugget is this chart, which suggests that subscriptions to TV+ have boomed since Apple and Amazon worked out a deal to sell TV+ subscriptions through Amazon Channels in Prime Video at the end of last year. That deal has, seemingly, moved the needle. Another interesting nugget is that TV+ seems to suffer from a higher churn rate than other streaming services. Said Belloni’s Puck colleague Julia Alexander, “Fewer than 35 percent of all subscribers keep the service for longer than six months.”

That’s kind of crazy. I’d think TV+ would have less churn, not more, than the industry average — that the Apple TV+ audience is small but loyal. Perhaps this is the unsurprising side effect of Apple giving away 3-month trials when you purchase new devices. But I also truly wonder if TV+ subscriptions are the hardest for industry groups to measure, because so many people who do subscribe watch through tvOS (or, on their phones, on iOS) where everything is private. Belloni hints at this, and says little birdies at Apple told him the TV+ subscriber base is larger than they’re getting credit for.

And how do you count Apple One subscribers toward TV+’s subscriber base? My vague theory about Cue and Cook’s thinking about getting into this business has been about making it one leg among several on the stool of reasons to subscribe to Apple One. That Apple will take subscribers who are only subscribed to TV+, or only subscribed to TV+ and Apple Music, but what they really want is to get people to subscribe to Apple One, which because it includes iCloud storage, almost certainly has very little churn.

Belloni closes thus:

Apple wouldn’t be the first tech powerhouse to dabble in professionally produced content only to retreat. [...] Neither Cook nor Cue has suggested anything like that, and Apple, in just over five years, has become a reliable partner and a high-quality buyer for Hollywood shows and movies. In some ways, it’s remarkable how fast Apple TV+ became part of the entertainment community. Whether that lasts is the question.

Here’s where I will point out that Apple isn’t like other tech companies. Apple isn’t a move fast and break things company. They’re a measure twice, cut once company. When they commit to something, they tend to stay committed. And they’re very, very good at playing long games that require patience, especially when entering new markets. Look at Apple Pay. 10 years ago, it was widely panned as a flop after a slow first year. Now it’s everywhere.